IAS 20

Accounting For Government Assistance

Objective
۩To prescribe the accounting treatment for government assistance ۩An appropriate methods of transfer of resources ۩Indication of beneficiary

Scope and Application
۩Apply to all Grants BUT NOT TO ۩Grants in form of Benefits (Tax Holidays) ۩Government participation ۩Grant Under IAS 41 (Agriculture)

Definitions
۩Grant (Subsidies, Premium) ۩Fair Value ۩Forgivable loan ۩Government

Accounting Treatment
۩ Capital Approach Under which grant Cr. to shareholder’s Interest ۩ Income Approach Grant taken as income over the period of time “As Income and other taxes charged if Grant relates to Depreciable assets” Grant Of Land = Non depreciable

Presentation Of Grant
۩ Grants relates to Assets ۩ Grant relates to income
Non Monetary grants at fair value set off set up grant as differed income deduct grant from carrying cost/amount of assets As a differed income under head of “Other Income” Or Deduct from relative expenses Repayment recognized as expense Reducing the differed income balance If the entity meet terms for forgiveness Record both grant and assets

۩ Repayment of Govt grants ۩ Forgivable loan

۩ Non monetary grants

۩ Government Assistance

Free Technical, Marketing, and other support

Disclosures
Accounting policy for method presantation Forms of Govt assistance Conditions and contingencies

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